Starbucks Corporation announced plans to eliminate 900 corporate positions across its US and Canadian operations, marking a significant workforce reduction as the coffee giant implements a comprehensive turnaround strategy under new leadership. The layoffs will primarily impact non-retail corporate staff, representing approximately 3% of the company’s overall North American workforce.
The Seattle-based coffee chain’s decision comes as newly appointed CEO Laxman Narasimhan accelerates restructuring efforts to combat declining sales and operational challenges. The layoffs will affect support roles across various departments, including marketing, technology, and administrative functions, while preserving front-line retail positions in stores.
“We are making these difficult but necessary decisions to create a more efficient organizational structure,” said Starbucks CFO Rachel Ruggeri in a company-wide memo. “These changes will allow us to invest more resources in store operations and customer experience while positioning Starbucks for sustainable long-term growth.”
The workforce reduction coincides with plans to close approximately 16 underperforming locations across major metropolitan areas, including Seattle, Portland, and several California markets. Industry analysts note that these closures primarily affect stores in downtown business districts that have struggled with reduced foot traffic since the pandemic.
Key factors driving the restructuring include:
- Declining comparable store sales in North American markets
- Increased operational costs due to inflation and wage pressures
- Competition from emerging coffee chains and convenience store alternatives
- Shift toward mobile ordering requiring fewer in-store support roles
- Need to streamline corporate overhead to improve profit margins
The announcement has drawn mixed reactions from industry experts and labor advocates. Restaurant industry analyst Mark Peterson commented, “Starbucks is facing the reality that many retail chains encounter post-pandemic – the need to right-size operations while adapting to changing consumer behaviors and economic pressures.”
However, Workers United, which represents Starbucks employees at several locations, criticized the layoffs as “shortsighted cost-cutting that prioritizes shareholder profits over worker stability.” The union called for greater transparency regarding severance packages and support for affected employees.
The layoffs come amid broader challenges in the food service industry, where major chains are grappling with labor shortages, rising costs, and evolving consumer preferences. McDonald’s, Subway, and Chipotle have all announced similar restructuring initiatives in recent months.
For affected employees, Starbucks is offering severance packages including up to 20 weeks of pay based on tenure, extended healthcare benefits, and career transition services. The company has also committed to prioritizing internal candidates for remaining positions and future hiring needs.
Starbucks stock responded positively to the announcement, rising 3.2% in after-hours trading as investors welcomed the cost-reduction measures. The company expects the restructuring to generate annual savings of approximately $200 million, which will be reinvested in store technology upgrades and employee benefits for remaining staff.
The coffee industry continues to evolve rapidly, with consumers increasingly favoring convenience, digital ordering, and premium experiences. These workforce adjustments reflect Starbucks’ efforts to align its operations with these trends while maintaining its position as the world’s largest coffeehouse chain.
Google Discover traffic for this story highlights growing interest in corporate restructuring news and its impact on the broader job market, as workers across industries monitor layoff announcements for potential career implications.